Logistics for Business Defined: Importance Role & Benefits

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Supply chain management, on the other hand, is a broader concept that encompasses the entire network of activities involved in the production and delivery of goods and services, from raw material sourcing to final delivery to the customer. Supply chain management includes logistics as one of its key components, but it also involves other functions such as procurement, production planning, demand forecasting, and supplier relationship management. Supply chain management is focused on optimizing the entire network of activities to improve efficiency, reduce costs, and enhance customer satisfaction. Third-party logistics companies are used when a business wants to outsource all or some of its distribution and fulfillment functions. Embracing a digital logistics software that empowers logistics stakeholders to drive data-backed decision-making goes a long way when it comes to seamless management of third-party logistics providers. Businesses can quickly access 3PL provider KPIs and map it to specific delivery needs.

What does logistics mean in retail

For example, late deliveries, damaged products, or poor communication about delivery status can lead to frustration and disappointment, and can harm the reputation of the company. Logistics management needs to evolve and adapt to the latest technological innovations to meet rising customer expectations, generate profits, and achieve growth. Companies need to implement the best logistics management practices to enhance operational performance by emphasizing process coordination and information sharing. Consider implementing cost-effective methods and value-added services for customers to ensure control on prices and prevent unnecessary price hikes. If achieving efficient logistics management is not powered by modern technologies or digital tools, chances of failure grow multifold. Three top areas where ERP benefits logistics are inventory control, staff management and product distribution.

Outpace competitors with AIT’s industry-leading retail logistics solutions

Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues and has also revised and edited educational materials for the Greater Richmond area. Easyship’s free fulfillment checklist provides a proven step-by-step so you can ship at scale without the guesswork.

What does logistics mean in retail

Business leaders understand this, and are prioritizing CX in their retail supply chain management strategies now, if they hadn’t been before. While 3PL providers are capable of handling the entirety of a company’s supply chain operations, the different components https://globalcloudteam.com/ of the logistics process can be carried out by individual players. For instance, freight companies solely handle the physical transportation of goods, while freight forwarders are dedicated to optimizing transport solutions and handling necessary documentation.

Expand your delivery options

From rising consumer expectations to the latest technological trends, there’s a lot that retailers need to stay on top of in order to maintain a competitive advantage, which is why it’s smart to partner with a full-service 3PL provider. Integrating a digital inventory system along with awarehouse automation system or 3PL’s software provides accurate order accuracy,faster fulfillment, and the ability to track inventory acrossdistribution centers. The Xpediator Group’s retail and fashion logistics division has the expertise and capability to support the most complex national or international freight forwarding and courier requirements. We deliver bespoke end-to-end supply chain logistics solutions that add value to our customers’ operations. Practicing effective retail supply chain management is vital to optimizing each logistical step that goes into a retail supply chain.

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With the acquisition, the longtime analytics vendor adds a data fabric approach and improved data quality and governance prowess … Originally, logistics played the vital role of moving military retail logistics software personnel, equipment and goods. While logistics is as important as ever in the military, the term today is more commonly used in the context of moving commercial goods within the supply chain.

Functions of Retail Logistics

Returns management, often referred to as reverse logistics, is the management of returned items to the company. Returns management involves reclamation of material and supplies from a production or assembly process or the return of damaged, unwanted and unused products from the end customer. Through proper inspection and sorting of returned products, one can significantly reduce losses by using undamaged/unused returned items to restock inventory. Material sourcing involves more than finding the lowest-cost supplier for a raw material used in manufacturing. Finding the right source for any given material requires a good understanding and management of all contributing factors. This process is called strategic sourcing, and logistics plays an important role in that planning.

  • However, this approach can be dicey, mainly when other sellers of the products are selling for a lower price.
  • In retail, logistics entails the direct flow of products from the manufacturer or supplier to the consumers.
  • Essentially, it’s all the plans and processes required to move retailers’ merchandise—either to stores for sales or display or directly to customers.
  • The days of only making purchases in person on the high street are long gone.
  • In military logistics, it is concerned with maintaining army supply lines with food, armaments, ammunitions, and spare parts apart from the transportation of troops themselves.

There are pros and cons to any type of business, and the same goes for brick-and-mortar stores and e-commerce sites. A brick-and-mortar store manages the flow of merchandise between the manufacturer and the consumer directly. An e-commerce store needs to package the order, ship it out, ensure delivery, and handle how returns are shipped back in some instances.

Why is retail supply chain management important?

Since the advent of the cryptocurrency boom a few years ago, blockchain has been consistently appearing in the news. Storage, transportation, inventory, and administration are all made possible. In order to satisfy consumer expectations, the system will make sure that the appropriate product is delivered to the right client at the right time.

One can either work in a pure logistics company, such as a shipping line, airport, or freight forwarder, or within the logistics department of a company. However, as mentioned above, logistics is a broad field, encompassing procurement, production, distribution, and disposal activities. ] in the industry is the 4PL, or fourth-party logistics, firms, consulting companies offering logistics services. Whereas a third-party logistics service provider targets a single function, a 4PL targets management of the entire process. Some have described a 4PL as a general contractor that manages other 3PLs, truckers, forwarders, custom house agents, and others, essentially taking responsibility of a complete process for the customer.

Optimizing operational costs

Browse through categories like route planning, fleet management, transportation dispatch, and similar. Explore global trends and business solutions in your region to list the tech providers that fit into your strategy. Every retail business that wants to drive sales and growth needs to find ways to lower costs and support services that are in demand.

Hence, well-handled logistics contributes to an overall positive customer experience. Outbound logistics refers to the transportation of finished products to customers from a warehouse or distribution centre. The outbound logistics stages are warehousing and storage, distribution, transportation, and last-mile delivery. It plays a critical role in a supplier’s overall customer relationship management process. Outbound logistics relates to how companies get their goods to the end-customer.


‘Retail logistics’ is the organist process of managing the flow of merchandise from the source of supply to the customer. The word logistics is derived from the french word “loger” which means “to quarter and supply troops”. When large number of troops and their equipment move, meticulous planning is required to move volumes of goods and ammunition in that direction.

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